Correlation Between Mesa Air and Planet Fitness
Can any of the company-specific risk be diversified away by investing in both Mesa Air and Planet Fitness at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mesa Air and Planet Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mesa Air Group and Planet Fitness, you can compare the effects of market volatilities on Mesa Air and Planet Fitness and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mesa Air with a short position of Planet Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mesa Air and Planet Fitness.
Diversification Opportunities for Mesa Air and Planet Fitness
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mesa and Planet is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mesa Air Group and Planet Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Planet Fitness and Mesa Air is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mesa Air Group are associated (or correlated) with Planet Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Planet Fitness has no effect on the direction of Mesa Air i.e., Mesa Air and Planet Fitness go up and down completely randomly.
Pair Corralation between Mesa Air and Planet Fitness
Given the investment horizon of 90 days Mesa Air Group is expected to under-perform the Planet Fitness. In addition to that, Mesa Air is 2.02 times more volatile than Planet Fitness. It trades about -0.05 of its total potential returns per unit of risk. Planet Fitness is currently generating about 0.16 per unit of volatility. If you would invest 8,231 in Planet Fitness on September 12, 2024 and sell it today you would earn a total of 1,786 from holding Planet Fitness or generate 21.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mesa Air Group vs. Planet Fitness
Performance |
| Timeline |
| Mesa Air Group |
| Planet Fitness |
Mesa Air and Planet Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mesa Air and Planet Fitness
The main advantage of trading using opposite Mesa Air and Planet Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mesa Air position performs unexpectedly, Planet Fitness can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Planet Fitness will offset losses from the drop in Planet Fitness' long position.| Mesa Air vs. Allegiant Travel | Mesa Air vs. Sun Country Airlines | Mesa Air vs. Frontier Group Holdings | Mesa Air vs. Azul SA |
| Planet Fitness vs. Life Time Group | Planet Fitness vs. Bowlero Corp | Planet Fitness vs. JAKKS Pacific | Planet Fitness vs. Six Flags Entertainment |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Correlations module to find global opportunities by holding instruments from different markets.
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